Food aid in the Farm Bill: One step closer to reform

After months of negotiation and a failed attempt to write new rules for agriculture into the Super Committee debt deal last Fall, the Senate Committee on Agriculture Nutrition and Forestry took the first step towards reauthorizing a new Farm Bill last week by passing a Farm Bill out of committee. Most of the energy and […]

After months of negotiation and a failed attempt to write new rules for agriculture into the Super Committee debt deal last Fall, the Senate Committee on Agriculture Nutrition and Forestry took the first step towards reauthorizing a new Farm Bill last week by passing a Farm Bill out of committee. Most of the energy and attention in the bill has been focused on commodity policy and new provisions for crop insurance, both issues Oxfam has written about in the past and continues to monitor in the current deliberations. After all, this is where the real money is and where US agriculture interests really dig in their heels.

Far less scrutiny has been placed on the section of the Farm Bill containing provisions for food aid programs. Over the last several months, Oxfam has sought to shine a light on these issues as a core component of the US response to global hunger. We’ve argued that the current program is badly outdated and in need of repair.

So, after round one of what is sure to be a bruising, multi-round fight on food and farm policy for the next five years, whither food aid reform? Here’s a quick run-down of what’s included in the food aid provisions of the Farm Bill:

1. Local and regional purchase (LRP): Buying food closer to the source of need seems like a no-brainer since independent analysis has already shown that in many cases it is faster and cheaper than purchase and shipment from the US. Oxfam supported the integration of LRP into the core food aid programs. Instead, the Committee chose to reauthorize a stand-alone program (basically making the existing pilot program permanent) with funding up to $40 million per year. This cap is too low, especially considering that over the life of the current Farm Bill, spending on food aid has averaged $2.3 billion annually. But keeping LRP in the bill is a step in the right direction.

2. More cash: Currently, NGOs implementing development programs using food aid (think, for example, of integrated nutrition programs with a food distribution component) can request up to 13 percent of their program costs in cash. But the needs of these programs often far exceed that 13 percent threshold, leaving aid groups struggling to find the cash they need to run their programs. The upper limit is now set at 35 percent. This isn’t high enough to satisfy need, but is a big step forward nonetheless.

3. Selling less food aid?: To get around the problem of not having enough cash to run programs, NGOs routinely sell food aid, a wasteful practice especially given how expensive it is to ship it on US-flag vessels (a requirement of current legislation). Selling food aid in developing countries usually generates less funding than it cost to buy the food in the first place. The rate of return on these sales, known as “cost recovery rate,” has been documented at 58 percent for USDA and 76 percent for USAID. What this means in practice is tens of millions of dollars are lost that could otherwise be used to reach millions of people, 2.1 million people per year by one recent estimate. In the proposal adopted last week, this practice gets some discipline: “monetization” cost recovery will be required to meet or exceed 70 percent of the cost of purchase and shipment from the U.S. The architecture of this provision is solid, but the 70 percent floor set for cost recovery is too low. If we’re serious about reducing waste in the US food aid program, the rate of return on food aid sales should be 80 percent at a minimum. This would be a true compromise as many, including Oxfam, have advocated for eliminating the practice of monetization altogether. Strong monitoring of market impacts of monetization to make sure this activity is not harming local agriculture markets is also missing from the legislation and should be incorporated.

4. Non-emergency food aid:One of thetrickier issues in thebillturned out to be the earmark for NGOs to use food aid in development programs. In the last Farm Bill, a special carve-out was created to ensure that non-emergency programs get a portion of the food aid budget. The problem is this earmarking ties USAID’s hands in times of crisis, making it difficult for them to meet urgent needs and spend money as effectively and efficiently as possible. The Senate Farm Bill proposal now provides for the earmark to fall within a band of between 15 and 30 percent of the total food aid budget, with a floor of no less than $275 million. This gives USAID more flexibility in determining how much of a limited aid budget should go to meeting emergency needs and how much to provide for non-emergency activities. This is a reasonable compromise between the position of many aid groups—including Oxfam—calling for maximum flexibility, and those groups calling for a hard earmark of $450 million (groups, by the way, who have been strangely silent on reforms needed to make food aid less wasteful).

5. And some welcome surprises: Two other issues of note in the Farm Bill are:

A call to focus on improving nutritional quality; and

A proposed pilot program for food resilience.

Both provisions carry the name of the late Representative Donald Payne, an advocate of Africa and development and sponsor of legislation to make US food aid more nutritious. Current Senate legislation picks up where the last farm bill left off in terms of promoting a greater focus on nutritional quality of food aid and incorporates provisions from Payne’s legislation. Additionally, the Donald Payne Horn of Africa Resilience Program would, if enacted, provide up to $10 million annually to link short and long-term responses to food insecurity in the Horn of Africa to reduce vulnerability and increase household and community coping capacities.

The reforms proposed by Chairwoman Stabenow (D-MI) and Ranking Member Roberts (R-KS) represent a solid basis for rethinking US food aid. The proposal represents an evolution, not a revolution, in the program, but a welcome move toward greater accountability of foreign aid resources.

The Agriculture Committee’s opening gambit paves the way for deliberation by the full Senate as well as the House Agriculture Committee, which has recently embarked on Farm Bill hearings. House Chairman Lucas (R-OK) has already made clear he has a different opinion about what US agriculture needs. And the House Committee’s recent proposal, cutting $33 billion over 10 years out of the Supplemental Nutrition Assistance Program (SNAP), puts it on record attacking the nation’s largest domestic food assistance program. The question is which direction are they heading with international food assistance?

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Author bio

Eric Muňoz

Eric Muňoz is the senior policy advisor for agriculture with a focus on food security, climate adaptation, and nutrition. Prior to joining Oxfam, Eric worked with Bread for the World where he helped to write five Hunger Reports on issues ranging from the farm bill to food aid to undernutrition.

Washington, DC

Oxfam is a global organization working to end the injustice of poverty. We help people build better futures for themselves, hold the powerful accountable, and save lives in disasters. Our mission is to tackle the root causes of poverty and create lasting solutions.

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